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FOR IMMEDIATE RELEASE

August 8, 2013

Treasurer Cowell Reports Fiscal Year End Pension Fund Returns
Fund Gains 9.52 Percent for Year

RALEIGH – State Treasurer Janet Cowell reported today that North Carolina’s pension fund returned 9.52 percent for the fiscal year ending June 30, 2013, beating the fund’s 7.25 percent long-term target rate of return and the market benchmark of 8.4 percent. The fund declined 0.61 percent during the second quarter of 2013. Pension fund assets were valued at $80.0 billion as of June 30, 2013.

The stock markets rallied during the fiscal year, which accounts for much of the fund’s gains. The pension fund’s global equity (stock) portfolio gained 18.78 percent over the fiscal year and 0.30 percent for the second quarter. 

The fixed income portfolio, which accounts for a third of the fund, lost 0.75 percent for the year and 3.61 percent for the quarter. Near record-low interest rates and rising rates in the near future pose a challenge for the fund. Eventual tightening of monetary policy will keep fixed income returns in the 2 to 4 percent range for the next 5 years.

“I am pleased that we reached a 9.52 percent return, which beats our target. This is good news as we secure the retirement for thousands of North Carolina families,” Cowell said. “At the same time, the stock market is volatile and fixed income presents a long-term challenge. That’s why I am glad the legislature granted additional investment flexibility so that we can take advantage of growth opportunities like credit and real estate.”

The credit strategies portfolio saw a gain of 17.45 percent for the year and 4.75 percent for the second quarter. Real estate rose 10.9 percent for the year and 4.38 percent for the quarter. Alternatives were up 5.81 percent for the year and 2.83 percent for the quarter. The inflation protection portfolio was down 2.95 percent for the year and 4.63 percent for the quarter.

The investment flexibility, Senate Bill 558, passed the General Assembly July 25 and awaits the Governor’s signature. The deadline to sign, veto, or let the measure become law without his signature is August 26. 

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View the Second Quarter Performance Report

The North Carolina Retirement Systems, the formal name for the pension fund, is now the eleventh largest public pension fund in the country. It provides retirement benefits and savings for more than 875,000 North Carolinians, including teachers, state employees, firefighters, police officers and other public workers. For more information, visit www.nctreasurer.com.